BASAVESHWAR ENGINEERING COLLEGE (AUTNOMOUS)

BAGALKOT
DEPARTMENT OF MANAGEMENT STUDIES

A REPORT ON
COMPETITVE BIDDING AND ITS PROCESS

SUBJECT: BUSINESS MARKETING

SUBMITTED TO SUBMITTED BY
DR. RASHMI HUNNUR SAGAR SHERKHANE
INTRODUCTION

A tender is a submission made by a prospective supplier in response to an invitation to

tender. It makes an offer for the supply of goods or services.

In construction, the main tender process is generally for the selection of the contractor that
will construct the works. However, as procurement routes have become more complex,
so tenders may be sought for a wide range of goods and services (for example, on
a construction management contract the works are constructed by a number of different trade
contract or seach contracted to the client) and contractors may take on
additional functions such as design and management.

There is also an increasing tendency for suppliers to be aggregated into single contracts, for
example, 'integrated supply teams' on public projects may include; the main
contractor, designers, sub-contractors, suppliers, facilities managers, and so on.

Irrespective of the nature of the goods or services that are being sought, the process for
securing tenders may take a number of different basic forms:

COMPETITIVE BIDDING
This refers to situation where the buyer asks two or more competing suppliers to submit or
quote prices and associated data on a proposed purchase or contract.
Bids are opened on a designated date and the contract generally awarded to the vendor with
the best partner and the quality.
Competitive bidding is a process of issuing a public bid with the intent that companies will
put together their best proposal and compete for a specific project. By law, this process is
required for every government agency that issues a bid. Competitive bidding creates a
transparent environment that is open and fair.
Types of Bidding
 Informal bidding - salespeople are asked to stop-by, briefed about the purchase and
asked to quote. This can be done on phone for few simple purchases. This happens in
purchases of lesser cost.
 If a public project subject to the provisions of this chapter is to be performed, a notice
inviting formal bids shall be mailed to all contractors for the category of work to bid
as shown on the list developed in accordance with Section 7-9.02 and to all
construction trade journals as specified by the Commission in accordance with
Section 22036 of the Public Contract Code. Additional contractors and/or
construction trade journals may be notified at the discretion of the department
soliciting bids, provided, however:

 If there is no list of qualified contractors maintained by the City for the particular
category of work to be performed, the notice inviting bids shall be sent only to the
construction trade journals specified by the Commission; and

 The project or service is proprietary in nature such that it can be obtained only from a
certain contractor or contractors. The notice inviting informal bids may then be sent
exclusively to such contractor.

 All mailing of notices to contractors and construction trade journals pursuant to this
section shall be completed not less than ten (10) calendar days before bids are due.

 The notice inviting informal bids shall describe the project in general terms and how
to obtain more detailed information about the project, and state the time and place for
the submission of bids.

 Open bidding - Here specifications are drawn up, suppliers contacted, final date for
written submission drafted. If supplier bids before the date, buyer sometimes opens
the bid and can ask the supplier in case of any changes possible? This is risky and
should be avoided.
  An open bid is a bid that can be changed or modified after submission, in order to
meet competing bids. It is also known as unsealed bid. An open bid is available for all
other bidders to see and possibly act upon. Open bidding may be done through a
traditional live auction, where an auctioneer calls out prices as bidders indicate their
willingness to pay.

 Open bids may be awarded for construction projects, where the lowest bidder often
gets the contract. An open bid sought for a project or for the award of a contract
begins with a bid request from the sponsoring agency. The sponsor is usually a
government or private company. The published request includes specifications that
can be reviewed by different bidders. Interested parties can submit a bid. After that,
the bidder can see if their bid is competitive with others by watching the bid board,
which may be a physical board or an online presentation.

 Closed bidding - Here sealed tenders are submitted which are opened in public to
avoid any sort of discrepancies in bidding.

 Closed bidding companies to offer their best price without knowing what the other
companies are offering: The supplier was chosen by closed bid.

The Tendering Process

 The provisions to obtain address and the contact details of the contractor at the time of
Technical offer and submission of bid form have been modified.
 Provisions of communication through fax and other electronic means have been
incorporated.
 Provision for deployment of machinery and establishment of field laboratory required
to ensure the quality of works as has been made in Contract Data as well as in GCC.
Failure to deploy machinery and equipment’s has been specifically included as a
fundamental breach.
 Provision of part possession of the work site has been made but at the starting of the
work, the Engineer will be required to handover possession of at least 75% of the site.
 Provision has been made for refund of 50% of retention amount and additional
 performance security for unbalanced bids after the completion of construction work.

 Provisions of issue of completion of construction works as well as maintenance work

have been modified.
 Provision of final account and final payment of construction work and routine
maintenance has been modified.
 The activities of routine maintenance and their frequency have been modified as per
Ministry of Rural Development Specifications for Rural Roads, August 2004.

Preparation of Bidding Document of important Dates of Bids

 Notice Inviting Tenders
 Press Notice
 Appendix to ITB
 Contract data
 Special Conditions of Contract
 Specifications
 Drawings:
 Bill of Quantities
PRESS ADVERTISEMENT OF NIT
In order to give wide publicity to the tendering process and generate adequate competition,
the tenders shall be published in reputed newspapers of the State in local language or English
as well as in one national newspaper in English.
SALE OF BIDDING DOCUMENT AND PRE BID MEETING
The sale of bidding documents will be effected as per the schedule. Sale of Tender
documents may also be arranged at Division, Circle and SRRDA levels. In order to allow
adequate access to bid document, these documents may be made available at SRRDA, also on
line
 A Pre-Bid Meeting will be organized on the specified date, place and time
 The meeting may be held at SRRDA in case the number of packages is not large, or at
circle level in other cases. The meeting will be chaired by the officer inviting tender
or an officer at-least of the rank of Executive Engineer. Clarifications given in
response to queries may be circulated by fax/e-mail to all bidders whether or not they
attended the pre bid meeting.
 OPENING OF BIDS
 The bids shall be opened at the specified place, date and time by the officer
authorized, in presence of bidders or their authorized representatives and will be
recorded. The signatures of bidders present (including representatives) and officers
present in the bid opening will also be obtained on the record of bid opening
maintained in the prescribed register (To be prescribed by the State Government). At
the designated time, the meeting to open bids will be held in which the authorized
representatives of the bidders and other officers as decided by the officer in-charge
will be present.
i. The bids will be taken up for evaluation with respect to the Qualification Information
and other information furnished in Part-I of the bid pursuant to Clause
ii. The bidder will be asked in writing (usually within 10 days of opening of the
Technical Bid) to clarify or modify his technical bid, if necessary with respect to any
rectifiable defects.
iii. The bidders will respond in not more than 7 days of issue of the clarification letter,
of opening of the Financial Bid.
iv. On receipt of these clarifications, the Tender Processing Committee/Engineer will .
v. Evaluation of the technical bids with respect to qualification information and other
information furnished in Part-I of the bid in pursuant to Clause 12.1 of ITB, shall be
taken up and completed within 21 (Twenty One) working days of the date of bid
opening, and a list will be drawn up of the responsive bids whose financial bids are
eligible for consideration.
vi. The Employer shall inform, by Post, fax or e-mail, the bidders, whose technical bids
are found responsive, date, time and place of online opening of Part-II i.e. Financial
Bid as stated in the BDS. In the event of the specified date being declared a holiday
for the Employer, the bids will be opened at the appointed time and location on the
next working day. The Bidders or their representative may attend the opening of
financial bids
The following steps for the evaluation
 Cost of Bidding Document:
 Earnest Money:
 Qualification Information
 Eligibility of bidder:
 Qualification
 Demonstration of availability of equipment’s and personnel
 Production of Certificates
 Sub-contracting
 Methodology and Work Programme
 Disqualification
ACCEPTANCE OF BID AND PERFORMANCE SECURITY
After the evaluation, the complete case will be put up to the competent authority for approval.
It is desirable that the Chief Engineer (PMGSY) or CEO of the SRRDA be empowered to
decide Tenders so that long and complicated procedures are avoided in the interests of speedy
decision.
CONTRACT AND WORK ORDER
On completion of prerequisites, the Contract shall be signed and Work Order shall be issued
to the successful Bidder.
BIDDING DOCUMENTS
The set of the bidding documents comprises the documents listed below and addendum/corrigendum
issued in accordance with Clause 10.

Section Particulars
0 Invitation for Bids
1 Instructions to Bidders
2 Qualification Information and other forms
3 General Conditions of Contract & Conditions of Particular Application
4 Contract Data
5 Technical Specifications
6 Rules for Sanitary Arrangements of Workers
7 Contractors’ Labour Regulations
8 Form of Bid
9 Bill of Quantities (BOQ)/Schedules of Payment (S-I) & Variation (S-II)
10 Securities and other forms
11 Drawings, Site Investigation Data & Other Technical Plans
12 Documents to be furnished by Bidder

The bidder is expected to examine carefully all instructions, conditions of contract, BDS, forms,
terms, and technical specifications, bill of quantities, forms, Annexes and drawings in the Bid
Document. Failure to comply with the requirements of Bid Documents shall be at the Bidder’s own
risk. Pursuant to clause 25 thereof, bids which are not substantially responsive to the requirements of
the Bid Documents shall be rejected

CLARIFICATION OF BIDDING DOCUMENTS

A Prospective bidder requiring any clarification of the bidding documents may notify the Engineer in
writing or by cable (hereinafter “cable” includes facsimile and e-mail) at the Engineer’s Address
indicated in the Invitation for Bids. The Engineer will respond to any request for clarification which
he received earlier than s e v e n (7) days prior to deadline for submission of bids. T h e Engineer’s
response including a description of the enquiry but without identifying its source will be uploaded on
the website.
BID PRICES
 The contract shall be for the whole Project/Work as described in Clause 1.1 of ITB, based on
the Bill of Quantities/at the lump sum price submitted by the Bidder online.
i. For Percentage Rate Tenders, the bidder shall make online entries as at par or percent above
or percent below the estimated total cost in the Bill of Quantities as specified therein or Form
of Bid.
ii) For Item Rate Tenders, the bidders shall make online entries to fill in rates, prices and line
item total (both in figures and words) for all items of work described in the Bill of Quantities
along with total bid price (both in figures and words). The items for which no rate or price is
entered by the Bidder will not be paid for by the Employer when executed and shall be
deemed to be covered by the other rates and prices in the Bill of Quantities.
iii) For Lump Sum Tenders, the bidders shall make online entries of lump sum price (both in
figures and words) for full scope of project/work described in the Bidding Document.
 All duties, taxes and other levies payable by the Bidder under the contract, or for any other
cause shall be included in the rates, prices and total Bid Price submitted by the Bidder.
 The rates and prices quoted by the bidder are subject to adjustment during the performance of
the Contract in accordance with the provisions of the Conditions of

BID VALIDITY
 Bids shall remain valid for a period specified in the BDS after the deadline date for bid
submission specified in Clause 20. A bid valid for a shorter period shall be rejected by the
Engineer as non-responsive. In case of discrepancy in bid validity period between that given
in the undertaking pursuant to Clause 12.1(iv) and the Form of Bid submitted by the bidder,
the period mentioned in the undertaking shall be considered as bid validity period of the bid
by the bidder.

 In exceptional circumstances, prior to expiry of the original time limit, the Engineer may
request that the bidders may extend the period of validity for a specified additional period.
The request and the bidder’s responses shall be made in writing or by cable. A bidder may
refuse the request without forfeiting his bid security. A bidder agreeing to the request will not
be required or permitted to modify his bid, but will be required to extend the validity of his
bid security for a period of the extension and in compliance with Clause 16 in all respects.
CONCLUSION
Requirement of any construction should be done through an effective tendering system. The
tendering procedure basically covers the preparation of tender documents, free qualification
of contracts and evolution of bids which place a key role in the achievements of project
objectives.